Sunday, November 9, 2008

Understanding the bailout plan

This is an excellent analysis of the financial bailout by Naomi Klein. This article covers

  • the weaknesses of the bailout plan
  • conflicts of interest in administering the plan
  • what a decent plan might look like
One of Klein's key points is that the bailout is diverting billions of dollars to the wrong people and then being used an excuse to forestall any meaningful action on greenhouse gas emissions and investments in a greener, less unsustainable economy. This also leaves some food for thought,
Seventy firms applied for the gig (as "master custondian" - ed) the winner was Bank of New York Mellon. Describing the scope of the megacontract, bank president Gerald Hassell said, "It's the ultimate outsourcing - because the Federal Reserve and the Treasury do not have the mechanics to run the entire program, and we're essentially the general contractor across the entire program. It's going to cross our entire company."

This raises an interesting point: Has the Treasury partially nationalized the private banks, as we have been told? Or is it the other way around? Is it Treasury that has been partially privatized by Wall Street, its massive rescue plan now entirely in the hands of a private bank it is directly subsidizing?

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